8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 2^nd, 2015

Lenco Mobile Inc.

(Exact Name of Registrant as Specified in Charter)

__________________

Delaware	000-53830	75-3111137
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2025 First Avenue, Suite 320, Seattle, Washington	98121
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (206) 467-5343

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

Chapter 11 Bankruptcy

As previously disclosed, on September 6, 2014, Lenco Mobile, Inc. (the “Company”) and its wholly owned subsidiary, Archer USA, Inc. (“Archer USA” and, together with the Company, the “Debtors”), each filed a voluntary petition for relief (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Western District of Washington (the “Bankruptcy Court”), case numbers 14-16660-KAO and 14-16659-KAO. On December 16, 2014, the Company and Archer USA filed a joint motion for consolidation (the “Consolidation Motion”) of the two Chapter 11 cases. The Court granted the Consolidation Motion and the cases are now jointly administered under case number 14-16659-KAO under the caption “In re: Archer USA, Inc.; Lenco Mobile, Inc.”

All documents filed by the Debtors with the Bankruptcy Court, including the Notice of Claims Bar Date and the accompanying proof of claim form and instructions, are available for inspection at the Office of the Clerk of the Bankruptcy Court or online at https://ecf.wawb.uscourts.gov/cgi-bin/login.pl.

Modified SEC Reporting

As a result of the Bankruptcy Filing and the Company’s limited resources, the Company has adopted a modified reporting program with respect to its reporting obligations under the federal securities laws. In lieu of continuing to file Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is filing a Current Report on Form 8-K attaching the monthly financial reports required by the Bankruptcy Court. As such, the Company is no longer current with its Exchange Act reporting obligations for purposes of: (1) determining eligibility to use Securities Act Form S-2 or Form S-3 or (2) satisfying the current public information requirements of Securities Act Rule 144(c); or (3) satisfying the reporting issuer definition of Rule 902(1) of Regulation S.

On December 2^nd, 2015 the Debtors filed with the Bankruptcy Court a monthly operating report (the “Monthly Operating Report”). A copy of the Monthly Operating Report for the Debtors is attached hereto as Exhibit 99.1.

The Company cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Report, as it was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of any of the Debtors, or any other affiliate of the Company. The Monthly Operating Report contains unaudited financial information which has not been reviewed by independent accountants, is limited to the Debtors and is in a format prescribed by applicable bankruptcy laws. The financial information related to the Debtors included in the monthly operating report has been prepared to conform with specific instructions from the U.S. Trustee and is not presented in accordance with generally accepted accounting principles (“GAAP”) or SEC regulations applicable to financial statements contained in periodic reports filed with the SEC. Preparation of the Debtor’s financial statements in accordance with GAAP could result in material reconciliations and adjustments to certain financial information presented in the monthly operating reports.

The monthly operating report also contains information for periods that are different from those contained in the reports the Company has filed pursuant to the Exchange Act.

Such information also may not be indicative of the financial condition or operating results of the Debtors for the periods reflected in the Debtors’ financial statements or in its reports pursuant to the Exchange Act, or of future results. The financial information in the monthly operating report is not presented on a consolidated basis and does not present the consolidated results of the Debtors. Accordingly, the financial statements in the monthly operating reports cannot be compared with the consolidated financial condition and results of operations that the Company has reported in its Exchange Act filings.

2

Limitation on Incorporation by Reference

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such a filing.

Risk Related the Company’s Equity Securities

The Company cannot predict what the ultimate value of its equity securities may be or whether the holders of its equity securities will receive any distribution in the bankruptcy proceedings; however, it is likely that the Company’s equity securities will have very little or no value given the amount of the Company’s liabilities compared to its assets. The Company’s shareholders are cautioned that trading in shares of the Company’s equity securities during the pendency of the Bankruptcy Filings under Chapter 11 is highly speculative and poses substantial risks. Trading prices for the Company’s equity securities may bear little or no relationship to the actual recovery, if any, by holders in the Chapter 11 Case. Accordingly, the Company urges extreme caution with respect to existing and future investments in its equity securities.

Cautionary Note Regarding Forward-Looking Statements

This Current Report on Form 8-K contains certain forward-looking statements. Additional written and oral forward-looking statements may be made by the Company from time to time in Securities and Exchange Commission (SEC) filings and otherwise. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. These forward-looking statements include statements that are predictive in nature and depend upon or refer to future events or conditions. In this context, forward-looking statements may address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “goals”, “believes”, “will” and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. In addition, any statements concerning future financial performance, ongoing business strategies or prospects, and possible future actions, are also forward-looking statements. Lenco and Archer cautions readers that results predicted by forward-looking statements, including, without limitation, those relating to our future business prospects, revenues, working capital, liquidity, capital needs, interest costs and income are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements.

For the Company and Archer USA, particular risks and uncertainties that could cause actual future results to differ materially from those expressed in our forward-looking statements include, but are not limited to, the impact of and risks related to the Company’s and Archer USA's filing under Chapter 11 of the Bankruptcy Code, including risks related to obtaining approval and confirmation of the Company’s and Archer USA's plan of reorganization, the impact of any delay or inability in obtaining such confirmation, and the impact of our restructuring on the holders of our securities; risks related to the ongoing transition of our business; the risk of management or key employees departing the company; the impact of uncertainty regarding our ability to continue as a going concern on our liquidity and prospects; uncertainty concerning the ultimate success of our efforts to secure working capital; the impact of our restructuring on our ability to execute potential divestitures of certain assets and/or subsidiaries; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and quarterly reports on Form 10-Q. Forward-looking statements speak only as of the date the statements are made. Except as required under the federal securities laws and rules and regulations of the SEC, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Section 9. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 The Company’s Monthly Operating Report filed with the Bankruptcy Court on December 2^nd, 2015

3

:

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Lenco Mobile Inc.
Dated: January 11, 2016	By:	/s/ Matthew Harris
		Matthew Harris
		Chief Executive Officer

4

Exhibit Index

99.1 The Company’s Monthly Operating Report filed with the Bankruptcy Court on December 2^nd, 2015

EX-99.1

Exhibit 99.1

ARCHER USA INC.

BALANCE SHEET

As of

unaudited

	October 31, 2015			September 30, 2015			August 31, 2015			July 31, 2015			June 30, 2015			May 31, 2015			April 30, 2015			March 31, 2015			February 28, 2015			January 31, 2015
Assets
Current Assets
Cash and Cash Equivalents	$	4,545,300		$	4,907,429		$	1,716,485		$	2,152,886		$	2,261,488		$	1,999,516		$	2,105,148		$	2,199,193		$	2,236,441		$	2,466,025
Accounts Receivable, Net		5,798			5,798			15,787			(6,851	)		1,649			460,134			444,007			439,110			442,854			452,091
Prepaid Expenses		87,952			106,769			102,807			120,000			133,334			58,431			61,394			64,357			58,432			61,396
Intercompany Receivable		1,200,070			1,200,070			1,200,070			1,200,070			1,200,070			1,200,070			1,200,070			1,200,070			1,200,070			1,200,069
Other Current Assets		11,653			11,653			11,653			11,653			11,653			11,653			11,653			11,653			11,653			11,653
Total Current Assets		5,850,774			6,231,719			3,046,801			3,477,758			3,608,194			3,729,804			3,822,271			3,914,383			3,949,450			4,191,235
Fixed Assets, Net
Fixed Assets		82,652			82,652			82,652			82,652			82,652			82,652			82,652			82,652			82,652			82,652
Accumulated Depreciation		82,652			82,652			82,652			82,652			82,652			82,652			82,652			82,652			82,652			(82,652	)
Total Fixed Assets, Net		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		0			–
Intangible Assets, Net
Intangible Assets		2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			2,128,199
Amortization		2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			2,128,199			(2,128,199	)
Total Intangible Assets, Net		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		–
Total Assets	$	5,850,773		$	6,231,718		$	3,046,800		$	3,608,193		$	3,608,193		$	3,729,803		$	3,822,271		$	3,914,383		$	3,949,450		$	4,191,235
Liabilities and Equity
Current Liabilities
Accounts Payable	$	2,996,080		$	2,989,572		$	3,129,881		$	3,126,382		$	3,136,661		$	3,129,675		$	3,160,809		$	3,151,060		$	3,138,468		$	3,195,378
Accrued Liabilities		2,944,061			2,882,072			3,702,028			3,637,477			3,589,955			3,545,631			3,517,211			3,453,563			3,402,382			3,398,218
Deferred Revenue		170,468			170,468			170,468			169,468			172,968			281,692			275,192			279,692			291,025			298,358
Intercompany Payable		25,681,399			25,681,399			21,332,249			21,332,249			21,332,249			21,332,249			21,332,249			21,273,185			21,177,172			21,177,172
Note Payable - Current Portion		412,531			402,932			393,333			824,609			815,010			805,411			795,812			786,213			776,614			767,015
Total Current Liabilities		32,204,539			32,126,443			28,727,959			29,090,185			29,046,844			29,094,658			29,081,273			28,943,713			28,785,661			28,836,141
Stockholders Equity
Additional Paid In Capital		19,413,194			19,413,194			19,413,194			19,413,194			19,413,194			19,413,194			19,413,194			19,413,194			19,413,194			19,413,194
Retained Earnings		(45,307,919	)		(45,094,352	)		(45,025,622	)		(44,851,844	)		(44,778,048	)		(44,672,196	)		(44,442,524	)		(44,249,304	)		(44,059,056	)		(43,861,471	)
Net Income (Loss)		(459,041	)		(213,566	)		(68,731	)		(173,778	)		(73,796	)		(105,852	)		(229,673	)		(193,220	)		(190,349	)		(196,630	)
Total Stockholders Equity		(26,353,766	)		(25,894,725	)		(25,681,159	)		(25,612,428	)		(25,438,650	)		(25,364,855	)		(25,259,003	)		(25,029,330	)		(24,836,212	)		(24,644,906	)
Total Liabilities and Equity	$	5,850,773		$	6,231,718		$	3,046,800		$	3,477,757		$	3,608,193		$	3,729,803		$	3,822,271		$	3,914,383		$	3,949,450		$	4,191,235

1

ARCHER USA INC.

BALANCE SHEET

As of

unaudited

	December 31, 2014			November 30, 2014			October 31, 2014
Assets
Current Assets
Cash and Cash Equivalents	$	2,503,751		$	2,691,823		$	334,759
Accounts Receivable, Net		443,737			510,796			285,498
Prepaid Expenses		64,359			58,435			58,491
Intercompany Receivable		1,200,070			1,100,070			110,070
Other Current Assets		11,653			11,653			18,955
Total Current Assets		4,223,570			4,372,777			1,797,773
Fixed Assets, Net
Fixed Assets		82,652			82,652			82,652
Accumulated Depreciation		(82,652	)		(82,652	)		(82,652	)
Total Fixed Assets, Net		–			–			–
Intangible Assets, Net
Intangible Assets		2,128,199			2,128,199			5,004,100
Amortization		(2,171,043	)		(2,144,811	)		(2,118,579	)
Total Intangible Assets, Net		(42,844	)		(16,612	)		2,885,521
Total Assets	$	4,180,726		$	4,356,165		$	4,683,294
Liabilities and Equity
Current Liabilities
Accounts Payable	$	3,236,810		$	3,236,965		$	3,068,651
Accrued Liabilities		3,363,131			3,155,748			3,053,228
Deferred Revenue		294,191			301,692			348,205
Intercompany Payable		21,020,297			21,020,297			21,020,297
Note Payable - Current Portion		757,416			747,817			738,218
Total Current Liabilities		28,671,846			28,462,519			28,228,600
Stockholders Equity
Additional Paid In Capital		19,413,194			19,413,194			19,413,194
Retained Earnings		(43,554,434	)		(42,960,391	)		(42,521,277	)
Net Income (Loss)		(349,880	)		(559,156	)		(437,223	)
Total Stockholders Equity		(24,491,120	)		(24,106,354	)		(23,545,306	)
Total Liabilities and Equity	$	4,180,726		$	4,356,165		$	4,683,294

2

ARCHER USA INC.

STATEMENT OF OPERATIONS

As of

unaudited

	October 31, 2015			September 30, 2015			August 31, 2015			July 31, 2015			June 30, 2015			May 31, 2015			April 30, 2015			March 31, 2015			February 28, 2015			January 31, 2015
Revenue
Revenue - Sales	$	–		$	–		$	–		$	–		$	–		$	1,370		$	1,366		$	1,225		$	1,302		$	1,098
Revenue - Services		0			0			1,500			5,000			4,500			6,451			3,237			13,094			12,082			17,333
Revenue - Other		0			(9,989	)		4,500			1,500			4,000			2,807			4,793			4,787			10,305			312
Sales Returns and Discounts		0			(11,814	)		525			525			525			2,839			9,509			4,558			3,149			(1,056	)
Total Revenue		0			1,826			5,475			5,975			7,975			7,789			(113	)		14,548			20,540			17,687
Cost of Revenue
Cost of Sales Revenue		0			0			1,028			17			0			(21,137	)		34,831			(22,611	)		8,608			(32,972	)
Cost of Goods Sold		0			0			0			0			0			0			0			4,000			2,000			2,000
Cost of Other Revenue		0			0			0			4,000			1,500			1,500			6,667			17,167			3,775			14,167
Total Cost of Revenue		0			0			1,028			4,017			1,500			(19,637	)		41,497			(1,445	)		14,383			(16,806	)
Gross Profit		0			1,826			4,447			1,958			6,475			27,426			(41,610	)		15,993			6,157			34,493
Operating Expenses
General and Administrative Expenses		396,058			44,644			73,916			71,263			75,386			36,529			80,551			84,084			92,033			108,199
Marketing and Advertising Expenses		483			483			483			632			799			1,074			1,399			1,695			858			2,660
Depreciation and Amortization Expenses																							0			–			–
Payroll and Related Expenses		32,870			61,704			60,075			74,726			74,220			81,959			80,796			73,222			75,344			94,837
Utilities and Facilities		0			198			198			2,852			2,654			2,852			2,852			2,853			2,857			2,858
Operating and Maintenance Expenses		854			98,399			(89,297	)		10,111			(109,533	)		565			702			25,890			3,745			1,082
Taxes and Insurance		18,839			0			17,194			5,797			26,667			0			11,397			11,397			11,397			11,407
Total Operating Expenses		449,103			205,427			62,569			165,381			70,193			122,979			177,698			199,141			186,233			221,042
Other Income (Expense)
Interest Income		40			29			15			16			16			17			17			18			17			20
Other Income		(380	)		(395	)		(1,025	)		(772	)		(495	)		(717	)		(782	)		(490	)		(690	)		(502	)
Interest Expenses		(9,599	)		(9,599	)		(9,599	)		(9,599	)		(9,599	)		(9,599	)		(9,599	)		(9,599	)		(9,599	)		(9,599	)
Other Expense																										–			–
Total Other Income (Expense)		(9,938	)		(9,965	)		(10,609	)		(10,355	)		(10,078	)		(10,299	)		(10,365	)		(10,071	)		(10,272	)		(10,080	)
Net Income (Loss)	$	(459,041	)	$	(213,566	)	$	(68,731	)	$	(173,778	)	$	(73,796	)	$	(105,852	)	$	(229,673	)	$	(193,220	)	$	(190,349	)	$	(196,630	)

3

ARCHER USA INC.

STATEMENT OF OPERATIONS

As of

unaudited

	December 31, 2014			November 30, 2014			October 31, 2014
Revenue
Revenue - Sales	$	873		$	835		$	168,185
Revenue - Services		24,270			418,236			159,405
Revenue - Other		221			16,702			88,495
Sales Returns and Discounts		(197	)		(2,353	)		(4,138	)
Total Revenue		25,167			433,420			411,947
Cost of Revenue
Cost of Sales Revenue		82,203			127,660			114,356
Cost of Goods Sold		(32,965	)		2,000			(35,452	)
Cost of Other Revenue		12,054			12,054			52,861
Total Cost of Revenue		58,787			141,714			131,764
Gross Profit		(33,620	)		291,706			280,182
Operating Expenses
General and Administrative Expenses		132,299			197,194			257,294
Marketing and Advertising Expenses		2,711			5,198			7,947
Depreciation and Amortization Expenses		26,232			26,232			32,441
Payroll and Related Expenses		138,921			164,995			248,703
Utilities and Facilities		1,909			11,856			11,699
Operating and Maintenance Expenses		(4,384	)		449,933			122,876
Taxes and Insurance		11,397			19,196			21,566
Total Operating Expenses		309,084			874,604			702,526
Other Income (Expense)
Interest Income		21			13			0
Other Income		(610	)		(1,558	)		(3,434	)
Interest Expenses		(9,599	)		(9,599	)		(14,295	)
Other Expense		3,012			0			0
Total Other Income (Expense)		(7,176	)		(11,144	)		(17,729	)
Net Income (Loss)	$	(349,880	)	$	(594,042	)	$	(440,072	)

4

ARCHER USA INC.

STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

As of

unaudited

	October 31, 2015
Beginning Cash	$	1,716,485
Transfer in from other estate bank accounts		1,200,000
Cash receipts deposited to this account		4,383,182
Financing or other loaned funds		0
Total cash available this month		7,299,666
Transfers out to other estate bank accounts		(1,200,000	)
Cash disbursements from this account		(1,192,238	)
Adjustments		0
Ending cash balance	$	4,907,429

5

LENCO MOBILE, INC.

BALANCE SHEET

As of

unaudited

	October 31, 2015			September 30, 2015			August 31, 2015			July 31, 2015			June 30, 2015			May 31, 2015			April 30, 2015			March 31, 2015			February 28, 2015			January 31, 2015
Assets
Current Assets
Intercompany Receivable	$	23,850,466		$	23,850,466		$	19,501,316		$	19,501,316		$	19,501,316		$	19,501,316		$	19,501,316		$	19,501,316		$	19,501,316		$	19,501,316
Total Current Assets		23,850,466			23,850,466			19,501,316			19,501,316			19,501,316			19,501,316			19,501,316			19,501,316			19,501,316			19,501,316
Fixed Assets, Net
Fixed Assets		93,568			93,568			93,568			93,568			93,568			93,568			93,568			93,568			93,568			93,568
Accumulated Depreciation		93,568			93,568			93,568			93,568			93,568			93,568			93,568			93,568			93,568			(93,568	)
Total Fixed Assets, Net		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		–
Intangible Assets, Net
Intangible Assets		17,386,597			17,386,597			21,735,747			21,735,747			21,735,747			21,735,747			21,735,747			21,735,747			21,735,747			21,735,747
Amortization		419,048			419,048			419,048			419,048			419,048			419,048			419,048			419,048			419,048			(419,048	)
Total Intangible Assets, Net		16,967,549			16,967,549			21,316,699			21,316,699			21,316,699			21,316,699			21,316,699			21,316,699			21,316,699			21,316,699
Total Assets	$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015
Liabilities and Equity
Current Liabilities
Accrued Liabilities	$	4,031,681		$	4,031,681		$	4,031,681		$	4,031,681		$	4,031,681		$	4,031,681		$	4,031,681		$	4,031,681		$	4,031,681		$	4,031,681
Accrued Taxes		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		–
Dividend Payable		8,070,990			7,905,517			7,740,044			7,574,571			7,409,098			7,243,625			7,072,637			6,907,164			6,738,146			6,585,484
Intercompany Payable		667,699			667,699			667,699			667,699			667,699			667,699			667,699			667,699			667,699			667,699
Note Payable - Current Portion		18,047,297			17,957,452			17,867,608			17,777,763			17,687,918			17,598,074			17,507,280			17,417,494			17,326,758			17,238,985
Total Current Liabilities		30,817,667			30,562,349			30,307,031			30,051,714			29,796,396			29,541,078			29,279,297			29,024,038			28,764,284			28,523,848
Stockholders Equity
Preferred Stock		348			348			348			348			348			348			348			348			348			348
Common Stock		(218,111	)		(218,111	)		(218,111	)		(218,111	)		(218,111	)		(218,111	)		(218,111	)		(218,111	)		(218,111	)		(218,111	)
Additional Paid In Capital		96,662,223			96,540,390			96,418,557			96,296,724			96,174,891			96,053,058			95,931,225			95,809,392			95,687,559			95,565,726
Retained Earnings		(86,232,434	)		(85,855,283	)		(85,478,132	)		(85,100,982	)		(84,723,831	)		(84,345,732	)		(83,963,124	)		(83,585,083	)		(83,206,458	)		(82,845,284	)
Net Income (Loss)		(211,678	)		(211,678	)		(211,678	)		(211,678	)		(211,678	)		(212,626	)		(211,620	)		(212,568	)		(209,607	)		(208,512	)
Total Stockholders Equity		10,000,348			10,255,666			10,510,983			10,766,301			11,021,619			11,276,936			11,538,718			11,793,977			12,053,731			12,294,166
Total Liabilities and Equity	$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015		$	40,818,015

6

LENCO MOBILE, INC.

BALANCE SHEET

As of

unaudited

	December 31, 2014			November 30, 2014			October 31, 2014
Assets
Current Assets
Intercompany Receivable	$	19,501,316		$	19,501,316		$	19,501,316
Total Current Assets		19,501,316			19,501,316			19,501,316
Fixed Assets, Net
Fixed Assets		93,568			93,568			93,568
Accumulated Depreciation		(93,568	)		(93,568	)		(93,568	)
Total Fixed Assets, Net		–			–			–
Intangible Assets, Net
Intangible Assets		21,735,747			21,735,747			21,735,747
Amortization		(419,048	)		(419,048	)		(419,048	)
Total Intangible Assets, Net		21,316,699			21,316,699			21,316,699
Total Assets	$	40,818,015		$	40,818,015		$	40,818,015
Liabilities and Equity
Current Liabilities
Accrued Liabilities	$	4,031,681		$	4,031,681		$	4,031,681
Accrued Taxes		4,000			4,000			4,000
Dividend Payable		6,416,466			6,249,431			6,087,784
Intercompany Payable		667,699			613,699			613,669
Note Payable - Current Portion		17,148,306			17,158,661			17,069,016
Total Current Liabilities		28,268,152			28,057,472			27,806,180
Stockholders Equity
Preferred Stock		348			348			348
Common Stock		(218,111	)		(218,111	)		(218,111	)
Additional Paid In Capital		95,443,893			95,322,060			95,200,227
Retained Earnings		(82,510,788	)		(82,132,275	)		(80,756,200	)
Net Income (Loss)		(165,478	)		(211,478	)		(1,214,428	)
Total Stockholders Equity		12,549,863			12,760,543			13,011,835
Total Liabilities and Equity	$	40,818,015		$	40,818,015		$	40,818,015

7

LENCO MOBILE, INC.

STATEMENT OF OPERATIONS

As of

unaudited

	October 31, 2015			September 30, 2015			August 31, 2015			July 31, 2015			June 30, 2015			May 31, 2015			April 30, 2015			March 31, 2015			February 28, 2015
Operating Expenses
Payroll and Related Expenses - Stock Option (non-cash)	$	121,833		$	121,833		$	121,833		$	121,833		$	121,833		$	121,833		$	121,833		$	121,833		$	121,833
Total Operating Expenses		121,833			121,833			121,833			121,833			121,833			121,833			121,833			121,833			121,833
Other Income (Expense)
Interest Expenses		(89,845	)		(89,845	)		(89,845	)		(89,845	)		(89,845	)		(90,793	)		(89,787	)		(90,735	)		(87,774	)
Other Income		0			0			0			0			0			0			0			0			0
Total Other Income (Expense)		(89,845	)		(89,845	)		(89,845	)		(89,845	)		(89,845	)		(90,793	)		(89,787	)		(90,735	)		(87,774	)
Net Income (Loss)	$	(211,678	)	$	(211,678	)	$	(211,678	)	$	(211,678	)	$	(211,678	)	$	(212,626	)	$	(211,620	)	$	(212,568	)	$	(209,607	)

8

LENCO MOBILE, INC.

STATEMENT OF OPERATIONS

As of

unaudited

	December 31, 2014			November 30, 2014			October 31, 2014
Operating Expenses
Payroll and Related Expenses - Stock Option (non-cash)	$	121,833		$	121,833		$	121,833
Total Operating Expenses		121,833			121,833			121,833
Other Income (Expense)
Interest Expenses		(43,645	)		(89,645	)		(1,092,595	)
Other Income		0			0			0
Total Other Income (Expense)		(43,645	)		(89,645	)		(1,092,595	)
Net Income (Loss)	$	(165,478	)	$	(211,478	)	$	(1,214,428	)